Operating Ratio
A ratio that shows the efficiency of management by comparing operating expense to net sales:
Investopedia Commentary
The smaller the ratio, the greater the organization's ability to generate profit if revenues decrease. When using this ratio, however, investors should be aware that it doesn't take into account debt repayment or expansion.
Related Links
Ratio Analysis Tutorial
Working Capital Works
Doing More With Less: The Sales-Per-Employee Ratio
The Bottom Line On Margins
See also: Net Sales, Operating Expense, Profit Margin
operating ratio